Bartsch, F., Buhlmann, F., Kirschenmann, K. and Schmidt, C. (2021). Is there a need for reverse mortgages in Germany? Empirical evidence and policy implications. EconPol Policy Report 31, April 2021

We analyse the market for reverse mortgages in Germany and explore reasons why the market it so small. While being a product that would increase household welfare, the market is not well developed and would benefit from stronger regulatory framework.

Schmidt, C. (2021). Strong tenant protections and subsidies support Germany’s majority-renter housing market. Brookings Institution brief. In "Comparing Rental Housing Markets Across the Globe", Jenny Schuetz, series editor. Washington DC: Brookings Institution

This essay is part of a multi-country case-study project on rental markets and policies around the world in which we compare markets in France, Germany, Japan, Spain, the UK and the US.

Schmidt, C. (2019). The quest for affordable owner-occupied housing in Germany. Journal of European Real Estate Research 12(3), 365-379

I shed light on a new demand subsidy for low- to medium-income households and its likely price implications for Germany.


Working papers

Risk attitude and capital market participation: is there a gender investment gap in Germany? (with J.-C. Fey, O. Lerbs and M. Weber)

Do women invest differently than men? We contribute to the answer of this question by analysing the Panel on Household Finances (PHF) of the German Bundesbank. This representative panel collects a wide variety of behavioural and financial variables in the area of household finance. We find that participation in risky assets is generally lower among women than among men. Once risk attitude is controlled for, this effect shrinks to only 2.6 percent. We find no difference when single women are compared to single men -- even irrespective of other demographic variables. The raw gap in capital market participation is mainly explained by different risk attitudes and monetary endowments, but women would participate even less in the capital market if they reacted as sensitively to risk aversion as their male counterparts. Lastly, given participation in the market, we find that both genders hold comparable portions of risky assets in their portfolios. Within their risky assets, men invest more in certificates and listed shares whereas women invest more in funds.

Presented at:

  • 3rd Household Finance Workshop in Heimbuchenthal, Germany, October 2018 (presented by co-author)
Click here to access the paper.

Firms' Births, Relocations, Deaths, and Rental Time on the Market: A Quasi-experiment with German Commercial Real Estate (with J. Cohen and Y. Huang)

Using a proprietary dataset recording all firm births and deaths in Germany including their addresses at the plant level, we analyze how road infrastructure affects firms' location choice and time on the market for commercial rental real estate. In particular, an early 2012 quasi-experiment in Cologne, Germany allows us to measure how the market for commercial real estate incorporates new information into rents and time on the market when an important bridge is closed for heavy vehicles. As a crucial part of the highway infrastructure around the Cologne-Leverkusen area in Germany, this bridge is frequented by about 120,000 vehicles every day and was suddenly closed for trucks over 3.5 tons in 2012. We use difference-in-differences as well as triple-difference-in-differences as our identification strategies, and find that while rent levels are not affected by the bridge closure, clustering in more conveniently located areas becomes significantly more pronounced. We take this as evidence that infrastructure matters a lot for firms that ship their goods across the country. In other words, firms on the west side of the closed bridge face relocation decisions because the largest part of the German road network is on the east side of the bridge. With this limited access to the major road networks, we find that "treated" rental units experience a longer time on the market than untreated units, so the market avoids commercial real estate that has no access to major road networks.

Accepted for presentation at:

  • European Meeting of the Urban Economics Association in London, April 2020 (cancelled due to COVID-19)
  • ASSA-AREUEA conference in Chicago, USA, January 2021 (withdrawn doe to COVID-19)


The odd one out: asset uniqueness and price precision (with T. Lindenthal)

Based on applied machine learning (ML) techniques this paper suggests that round prices are not purely random events but are linked to liquidity and the uniqueness of the asset. First, using residential transaction data from the UK, we show that the availability of information from comparable sales influences the odds of observing a sale at a round price. Second, we explore ways to play to the strengths of deep neural network and incorporate computer vision approaches and building level imagery. Adding information on a building's vintage and the typology of its direct surroundings to the training data boosts the predictive power of the suggested ML classi ers. When a house is "the odd one out", its value will be relatively difficult to establish which implies that sales prices suffer from a relatively low signal-to-noise ratio. Automatic appraisal systems or index estimations could improve their accuracy by incorporating our findings.

Presented at:

  • Weimer School Hoyt Fellows meeting, May 2019 (presented by co-author)
  • ASSA-AREUEA conference in San Diego, USA, January 2020

Home is where the health is: housing and adult height, 1870-1965

Poor sanitation and overcrowding have severe impact on the disease environment. This study analyzes the impact of housing quality on physical health, proxied by adult height, during the late 19th and the first half of the 20th centuries. Using panel data on 14 advanced economies, the empirical results suggest that improved housing quality—proxied by rising housing prices—significantly contributed to human stature by reducing overcrowding and creating better hygienic standards. To be precise, a one-standard-deviation increase in real house prices translated to 1–1.2 cm taller adult heights—an amount which at that time was associated with 1.2 to 2.1 years of additional life expectancy on average. Also, 15 percent of the average height increase of 10 cm across all countries can be attributed to housing quality. These findings are robust even when we control for income.

Presented at:

  • ASSA-AREUEA Conference in Philadelphia, USA, January 2018 (poster)
  • Annual conference of the Economic History Society (EHS) in Keele, England, April 2018 (view press release here)
  • Conference of the European Real Estate Society (ERES) in Reading, UK, June 2018
  • AREUEA International Conference in Milan, Italy, June 2019

Homeownership: Boon and Bane

I study the relationship between per-capita GDP growth and the homeownership rate in a panel of 21 industrialized countries during the period 2000--2014 to examine whether investments in housing have different consequences for an economy than investments in non-housing. I use an IV approach because homeownership is highly endogenous. After controlling for a number of variables to reduce further endogeneity problems, I find evidence for an initially positive impact of homeownership on the economy, as suggested by studies on positive externalities of owner-occupied housing. However, there is a critical homeownership rate after which this relationship becomes inverse; i.e., the relationship between homeownership and GDP growth is hump-shaped: the negative externalities appear to outweigh the positive ones starting at a homeownership rate of roughly 68 percent. Hence, owner-occupied housing should not be encouraged beyond this socially optimal rate, as the returns to housing may be lower than those to non-housing. While a slight deviation from the optimal point has little effect on GDP, which is the case for the U.S., German-speaking and southern European countries could gain by adjusting their homeownership rates.

Presented at:

  • 2nd International Conference on Applied Macro, Theory and Empirical Finance in Thessaloniki, Greece, May 2016
  • 6th Ioannina Meeting on Applied Economics and Finance in Corfu, Greece, June 2016
  • AREUEA International Conference in Amsterdam, Netherlands, July 2017
  • RWTH Aachen Brown Bag Seminar in Aachen, Germany, July 2018

Work in progress or preparation

The role of real estate and reverse mortgages for retirement income and wealth of German households

Coming to terms with ambiguous asset dimensions: quality, beauty and uniqueness in the built environment (with T. Lindenthal)

House prices in Frankfurt since 1290 (with T. Lindenthal)

House prices in Scotland, 1800–1940


Teaching cases in economics and finance

Schmidt, C. (2016). A Journey Through Time: From the Present Value to the Future Value and Back Or: Retirement Planning: A Comprehensible Application of the Time Value of Money Concept. American Journal of Business Education 9 (3), 137–143. 

Schmidt, C. (2016). Burgernomics: An Instructional Case on the Law of One Price. Journal of Business Case Studies 12 (2), 77–82.

Moersch, M. and C. Schmidt (2015). Of Haircuts and Extensions: An Analysis of Greek Government Debt. International Research Journal of Applied Finance VI  (8), 1–11. 

Schmidt, C. and T. Azarmi (2015). The Impact of CoCo Bonds on Bank Value and Perceived Default Risk: Insights and Evidence from Their Pioneering Use in Europe. Journal of Applied Business Research 31(6), 2297–2306.